Is this possible, new mortgage with existing lender but no deposit?

dantheman2010

I have a very quick question for you regarding a new mortgage with an existing lender and I wondered if you would be so kind as to let me know if it is possible or not? Although I am sure it must be a no.

Do mortgage companies allow people to move home (therefore clearing existing mortgage) but borrow more on the new property without a deposit? I understand why a new lender wouldn’t want to do that, maybe an existing lender would?

Currently I am with C&G and I am on an interest only mortgage, if I was able to buy a house about £120-130k (which is about £20k more than I currently owe) would they transfer/give me a new mortgage for the full whack? I would be able to afford a repayment mortgage (as I wouldn’t be saving for a deposit anymore which I have just started doing) therefore clearing some of the mortgage balance monthly which I am currently not doing. Or does this not matter, is it all about LTV?

Thanks in advance.

grey_gym_sock

yes, you can use the equity in your current house as the deposit on the new 1, if the new LTV is not too high. (with an old or new lender.)

dantheman2010

Well thats the issue, as my house is worth about £115k and I owe £104k, so if I managed to get say £112k for it then that would be £8k left towards all fees. Then whatever is left would be the equity.

So all in all I suppose my question is;

Would they lend me an extra £20-30k overall, but on a new house and I have a repayment mortgage rather than interest only. So existing £104k would be clear, but the new amount would be say £125k, but I am on repayment.

I guess the answer to that is more than likely no?

opinions4u

Keep saving.

If you have £8k of equity most of that will be swallowed up in fees.

You need more equity or more savings. Typically a 10%+ deposit in addition to the moving costs, out of savings or equity, is needed.

dantheman2010

Ok thanks. I wasnt sure if it was a bit like a personal loan i.e. you can owe x lender £10k and then ask for a further £5k and they would do a credit check etc and let you know one way or the other.

Wasnt sure if it was same with mortgages just on a bigger scale and I wasnt sure whether my existing lender giving me more cash but on a repayment basis would be something they would do.

Oh well, back to the saving.

kingstreet

If you move but don't borrow more, LBG's equity support scheme might be helpful. It allows you to transfer negative equity from your old property to a new one.

As you are looking to borrow more, it may not suit at this time.